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Media & Policy

A friend of mine showed my last post to someone who works at The Age whose response was that "it's the consumer, not the newspaper" that drives the lack of policy analysis. Obviously this is a second-hand paraphrasing of a not-fleshed-out line of argument, but I still have so many things to say about it!

First the snark - if Fairfax is pursuing a consumer-oriented model so that they stay profitable and viable, they're not doing a very good job. (Also, I referenced in my post two people off the top of my head who do this kind of writing in the US. Is the Australian market really dumber than the American one?)

This speaks to a more serious point, though, which is that newspapers do unprofitable things quite a lot and cross-subsidise, either within a publication or within a company (the News Limited tabloids subisidise the Australian, but almost all newspapers likely have lifestyle sections and human-interest stories which pay for foreign reporting). The reason they do those things is that they are part of the media's public interest remit, which is not official or mandated but something that most media companies happily adopt for themselves. It's hard to argue that serious writing about policy is not a part of the public interest or a part of less significance: it and investigative reporting, in my view, are probably the most important services media provides from a public-interest viewpoint. Given that newspapers, including The Age, do things which are not profitable all the time, the case against policy analysis cannot appeal exclusively to its lack of profitability.

Moreover, the point of what I wrote was not that newspapers don't do enough politics or policy reporting full stop, but that it is far less prevalent than analysis about partisan workings and electoral incentives. Now I haven't done market research on this, but it seems prima facie implausible that consumer demand for political science analysis is so much greater than demand for policy analysis that a change would actually make any difference to the bottom line. My suggestion wasn't for more policy writing at the expense of restaurant reviews or recipes or the odd sensationalist front-page story: it was just that, when there is an 'Analysis' column discussing a policy, it should discuss the actual policy and not its electoral motivations or impacts. That is, substitute one type of niche-y, political analysis with another kind. It's not a big overhaul of the way newspapers run, its a small (but significant, again in public-interest terms) change which could be made at the editor's discretion with, I think, no prohibitive change to profit.

Then there's the general case. The argument that consumers drive what the media produces is widespread and seemingly well-grounded in the basic theory of demand. I, however, don't think that it's really that strong or particularly likely to be true.

It's worth thinking about how consumer demand as a driver of production actually works, not just in the media but in all cases. It doesn't work by telepathic connection between consumers and producers such that 'demand' is automatically transmitted and responded to. The classical model suggests that there will be a number of firms, each offering (perhaps only slightly) different products to a market. Then, and only then, the products which consumers prefer get purchased more, those firms succeed and the non-preferred variants drop out of the market.

Obviously though, the prerequisite here is that first step, competition - not just in a general sense, but in the sense that there is competition to provide products which are broadly interchangeable. It's 2001, we want MP3 players, there are plenty of them about. Our demand for an MP3 player which is simple and aesthetically appealing drives the iPod to success; other devices follow its lead. Demand drives the nature of production.

I don't think this applies to the media market, for a few reasons (which I have numbered, but aren't really that discrete).

1. Barriers to entry

These don't exist uniquely in the media market. But at least within the mainstream (newspapers, TV stations, radio) they are significant: government licensing is necessary in many cases, the physical hardware and material needed can be expensive and difficult to maintain. The main source of revenue, advertising, is not readily available because advertisers would rather spend their money in established media: that creates a feedback loop where that lack of revenue prevents new media from ever becoming established.

Perhaps more importantly though, there is a similar feedback loop that makes it difficult even to create a good product. Journalists and analysts who are in the game because they want to be heard have an incentive to stay in places where they can be sure they will be. The cachet of existing media institutions makes it very difficult to poach good or big-name contributors; people would rather work for the New York Times than an upstart publication.

On the other side of the coin, people by-and-large read the same newspapers for years, and come to trust or at least have some relationship with that insitution; that's why people write letters to the editor, and why editorials on who to vote for exist and are meaningful. Given that reality, they're not very likely to change, which makes it extremely difficult for a new product to get a foothold.

The upshot of all these things is that it would be extremely difficult to launch a policy-analysing product in our media market. Of course, if such a product never gets launched, it doesn't get the chance to compete and so consumer preference doesn't get the chance to deliver its verdict.

Imagine
though that those barriers didn't exist, and if I wanted to launch a
newspaper tomorrow I wouldn't have that much trouble getting
contributors and advertisers on board. There would still be factors that might prevent that newspaper succeeding, even if it was serving the public interest and even if consumers might demand it.

2. Conditioning

People get used to all sorts of products. That can act to stifle demand: maybe there is a great new type of MP3 player, but people aren't buying it because they are used to click-wheels or Apple's touchscreen GUI. This kind of change-resistance doesn't do much more than slow a rise that might otherwise have happened faster, in most cases.

Uniquely though, conditioning in the media market - because it is such an integrated part of daily life, and because it is a pretty powerful influence on public opinion - acts much more pervasively than that. An iPod, though streets ahead of the things it was initially competing against, doesn't change our idea of what an MP3 player should fundamentally do: play music, be user-friendly, maybe have some nice ancillary perks. If a better one comes along, its adoption might be slowed by change-resistance and Apple fanboys, but it will ultimately win out if it's better on those metrics (obviously barriers, network effects, social cachet etc throw complications into this, but the point is we can still agree it's technically better, even if we don't adopt it as a result.)

Media conditioning, on the other hand, actually moves the goalposts. If we read titillating scandal-chasing papers with no serious analytical strength for long enough, that does two things. Firstly, it lessens our ability to appreciate and benefit from) (and so weakens our demand for) a more analytical products. Secondly, it ultimately changes our views on whether the media even should do that kind of thing. It would be as if, after decades of iPod use, our metric for what a good MP3 player is was radically transformed - instead of, for example, looking for something that's aesthetically nice, we look for something that is aesthetically like an iPod.

It's a subtle shift, but in the media market products have the ability to condition consumers to appreciate and demand only products that are like them. That means that, in an important respect, the media that exists leads consumer demand rather than following it; they have a responsibility to lead it in a direction that fosters better politics and better policy.

3. Demand mismatch

Newspapers are called newspapers for a reason: because primarily, people perceive them as and buy them to be providers of news. That is largely a separate thing from the analysis, commentary and editorials which happen to reside in the same pages.

So why do people buy newspapers? For the news. Maybe to check their stocks, or to gather recipes or even check a review. Not, that is, for the commentary and analysis they find on the inside pages. They may well end up reading and being influenced by those things anyway. This is one reason why News Ltd newspaper monopolies in most cities of Australia are so problematic - people come for the news, because there's no alternative, and then get exposed to the political views that come with it.

It's also a reason to suggest that there are a huge number of things within a newspaper which can be changed with editorial discretion, seeing as they have little or no relation to the demand for the product. They probably include the political leaning (within certain bounds of extremity), the strength of the editorial voice, and almost certainly the type of political analysis that gets presented.

This is similar to what I wrote above: consumers drive the production of relevant, interesting news and attention-grabbing front pages. Almost everything else, though obviously within limits, is not responsive to demand. A great number of people don't buy the Courier-Mail because they love right-leaning, aggressively-written commentary; they buy it because it offers them the news they want to hear and because it is the only option. Everything else follows.

Demand and competition are real forces. They do drive and shape products in most markets. That includes the market for media, in many important ways. In other, also important, ways, the content of our media is not a function of consumer demand. The media do not follow, they lead - they should do so more responsibly.